International Finance Discussion Papers (IFDP)
December 1992
Life Expectancy of International Cartels: An Empirical Analysis
Jaime Marquez
Abstract:
This paper examines the empirical relation between market structure and life expectancy for cartels that were active in international commodity markets throughout this century. I consider two alternative empirical formulations and estimate their parameters recognizing that durability cannot take negative values. Both formulations predict that increases in either market shares or intercartel concentration prolong life expectancy but disagree in the relative importance of these two factors. The application of tests to discriminate among the two formulations does not support constant-elasticity models.
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